Twitter is shaking up San Francisco. It’s the city’s 10th largest employer, and second largest tech employer, after Salesforce.

But it hasn’t yet figured out, despite a decade of trying, how to make money.

Last October, it announced that it would lay off 8% of its workforce. A couple of weeks ago, it reported a second-quarter net loss of $107 million along with disappointing user metrics and lousy projections.

Its shares have lost 74% since their miracle-IPO-hype peak at the end of December 2014.

And now Twitter is dumping nearly one third of its total office space on the San Francisco sublease market.

It leases a number of floors in the two buildings at Market Square. The four floors it put on the sublease market total 183,642 square feet of “fully furnished” office space with workstations for 1,416 employees, according to amarketing brochure by corporate real estate firm CRESA.

It’s the largest sublease space now available in San Francisco.

The largest of the floors, at 78,792 square feet, is at its 1355 Market location, the iconic former San Francisco Furniture Mart that Twitter moved into in 2012. The floor comes with “600 workstations, 49 conference rooms, multiple collaboration/lounge areas, 2 kitchens, 2 training rooms, and a Mother’s room,” according to the brochure.

It also listed three floors at the adjacent One 10th Street building that it moved into in 2014. The floors, 34,950 square feet each, are also fully furnished with similar amenities, and earned a “2016 International Interior Design Association – Honor Award,” according to the brochure. Twitter spared no expense before its IPO to dazzle investors with its buildings and show them what noble material it was made of.

San Francisco’s darling even extorted a highly controversial payroll tax exemption for six years from the city by threatening to head out of town when it was looking for larger digs in the neglected Mid-Market area.

All spaces listed are available “immediately” and rent is “negotiable,” the brochure says.

Twitter has been shrinking from its grandiose plans. In October last year, it abandoned plans to lease an additional 100,000 square feet at the building where Square is, at 1455 Market. Both companies share the same CEO, Jack Dorsey.

But this comes at an inopportune time for San Francisco’s office market.

According to commercial real estate firm Savillis Studley, vacant availability in Q2 rose to 8.3% (up from 7.7% in Q1), and Class A availability hit 9.2% (up from 8.4% in Q1). In the Financial District, it “spiked” to 9.8% (up from 8.6%). Despite “a flurry of large subleases and these direct deals” in Q2, with Fitbit, Lyft, and Stripe signing the largest deals, leasing activity over the past four quarters plunged 31% from the five-year average to 5.9 million square feet.

“Caution prevailed,” the report said, as “more firms coped with funding shortfalls by cutting back or considering relocations to other markets.”

After a relentless five-year boom, average asking rent, at $64.30 per square foot, according to Savillis Studley, is among the most outrageously expensive in the country and nearly twice the national average of about $33 a square foot.

That might not have made any difference to startups that were drowning in cash and faced no pressure to ever make money, or were even encouraged to burn through as much cash as possible to quickly grow into the next Facebook. But that era is now being superseded by the “post-unicorn era,” as Dropbox CEO Drew Houston called it so elegantly, and money suddenly matters.

But some of the smartest money already got out, at the peak last year.

San Francisco-based real-estate fund Shorenstein Properties acquired Market Square in 2011 for $110 million, according to The Registry. For another $200 million, it redeveloped the former Furniture Mart into a tech hub. With vestiges of hope still clinging to Twitter before the layoff announcement in October last year, and with office prices and rents soaring, Shorenstein decided to unload the property – and made a killing.

In August last year, it sold a 98% stake to JP Morgan Asset Management for $936 million, or $877 per square foot. This is what a totally crazy property boom will do, along with impeccable timing and knowing your way around city politics. It was one of the highest per-square-foot prices in the city’s history.

But the office boom faces two challenges: new office towers that are sprouting like mushrooms just when employment growth faces iffy prospects. Twitter isn’t alone. Numerous companies have started to lay off employees, even as others are still hiring. And employment has peaked.

In June, according to the California Employment Development Department, the number of jobs in San Francisco – 533,200 – was back where it had been in November last year:

I’m now getting “numerous” reports, anecdotally – up from just “one” four months ago – that people, even tech workers, beyond the age of Millennials, so folks in their early to mid-fifties, are getting laid off, and that they’re having trouble finding another job here. That doesn’t bode well at all for San Francisco’s commercial real estate bubble. When times get tougher, no one needs vast amounts of empty and utterly unproductive office space that is among the most expensive in the country.

But San Francisco is so expensive overall that a lot of people, once they lose their jobs, choose to leave and head to where life is more affordable. So this is the kind of problem San Francisco really doesn’t need at the moment. Tremors are already going through the condo market. Condo prices are under pressure. Sales volume has been down all year. The luxury end is in trouble. And now this: Read…  Is the “Leaning Tower of San Francisco” the Only One?

SEE ALSO: As earnings sag, Twitter is looking to sublease out 183,000 square feet from its headquarters

SEE ALSO: There's a real estate 'meltdown' happening in Houston

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In July, a sharp mechanism started working: one of the hottest commercial real estate markets in the world, and one of the most expensive, began to deflate. And the hiss is deafening.

Capital values for offices in the City of London – the financial district of London – plunged 6.1% in July, from June, real estate firm CBRE reported today. In its monthly index, “capital value” represents the probable prices that would have been paid at the date of valuation.

And it extended beyond London: In the UK office values dropped 4.1% from June. Commercial property values overall – including office, retail, industrial, and other – dropped 3.3%, which chopped year-over-year growth to 0.4%.

“Capital value growth was always expected to falter at some point during 2016, as global economic uncertainty cast doubt on … strong growth seen in previous years persisting for much longer,” explained Miles Gibson, Head of Research at CBRE UK. “The Brexit vote has now crystallized that expectation, though it is not the only driver of it.”

Commercial rental value remained flat in July, and for the moment, given “this heightened uncertainty,” that’s “reassuring,” Gibson said.

The sharp decline in property values was foreshadowed by UK property funds that suspended withdrawals, one after the other, in early July, as panicked investors were trying to yank their money out. Seven funds at latest count froze a total of £18 billion ($23.5 billion), the largest asset freeze since the Financial Crisis.

The process was kicked off by funds managed by M&G Investments, Aviva Investors, and Standard Life Investments that suspended trading on July 5 and 6. It was followed on July 7 by Henderson Global Investors citing “exceptional liquidity pressures” given the uncertainty after the Brexit vote and the fund suspensions in the prior two days. Other funds chimed in. BlackRock’s UK property fund jacked up quarterly redemption charges on its fund to a punitive 5.75%.

These conditions will likely persist “for weeks and months,” fund supermarket Hargreaves Lansdown, which sells these funds, told its clients at the time. “Over half of the property fund sector is now on ice, and will remain so until managers raise enough cash to meet redemptions. To do that they need to sell properties….” And that “is not a quick or painless procedure.”

By attracting investor money from around the globe that then needed to deployed in commercial real estate, these funds helped inflate the property bubble in London.

At the same time, they were riding on the coattails of the financial sector that gravitated to the City of London, along with foreign investors, particularly Russian oligarchs who now too have fallen on hard times due to the oil bust. Meanwhile, Chinese investors haven’t arrived in large enough numbers yet to bail them all out.

As these suspended funds try to sell properties to meet redemption requests, they will put further downward pressure on property values.

And so ends the phenomenal property boom that started after the Financial Crisis when central banks around the globe began their harebrained policies of dousing the world with freshly printed money and free debt in an effort to inflate all asset prices no matter what.

Analysts have expected that prices would eventually “slip.” But they probably had more of a “plateauing” in mind, rather than a plunge. Then the Brexit vote happened, which put some oomph into the calculus. The Wall Street Journal:

Analysts have warned that London office rents could start falling due to Brexit, preventing foreign companies based in the U.K. from selling services in the EU. This could force firms to relocate to other cities in Europe like Frankfurt, Paris, Amsterdam, or Dublin.

Empty space left behind could push rents lower still, in turn making the office buildings worth less overall.

In the residential property sector, the tremors are already cracking the last illusions. But again, don’t just blame Brexit. Read…  London Housing Bubble Melts Down

SEE ALSO: China's real estate bubble is going to bring down the entire world

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At just 25, Hugh Grosvenor became the 7th Duke of Westminster on Tuesday when his father died on Tuesday following a sudden illness.

It means the 25-year-old Grosvenor is now the richest person under 30 in Britain, inheriting a £9.35 billion ($13.32 billion) fortune — mostly made up of land ownership dating back to 1677.

So what do we know about the new Duke of Westminster?

• His education was not as fancy as you might think. He went to Newcastle University, to study countryside management. As a boy, he attended a local state primary school, a rarity for aristocracy who usually send their children to boarding school. He did however, attend Ellesmere College, a public school in Shropshire for his secondary education.
• He has three sisters:Lady Tamara, Lady Edwina, and Lady Viola. Hugh is only the third eldest of the four, but aristocratic etiquette dictates that the first-born son inherits the estate. His sisters, however, will get large trust funds.
• He is godfather to the future king. Hugh accepted the lofty honour of being Prince George's godfather at a christening back in 2013. It seems to be a trend for the Grovesnor family: Hugh's mother, the Duchess of Westminster, is godmother Prince George's father, Prince William.
• His 21st birthday was gigantic. Despite their wealth, the Grovesnors are a generally private family. However, for Hugh's 21st they decided to go all out, spending a rumoured £5 million. Entertainments at the party included comedian Michael McIntyre, and hip hop band Rizzle Kicks, according to the Chester Chronicle. No media was in attendance at the party so we don't know much more, although Hugh himself said at the time: "The party was simply amazing – a birthday and a party I will never forget. It is the beginning of a new era in my life and I look forward to the challenges that lie ahead."
• He will inherit huge chunks of prime London real estate. As well as inheriting Eaton Hall, his family home in Cheshire, Hugh is also now the owner of a massive 300 acres of hugely expensive London land, mostly in Belgravia and Mayfair. With an average house in these areas costing close to £3 million, it is easy to see why the Grosvenor family are so rich.
• He is actually very private. For a man who now one of the richest in the world, surprisingly little is known about Hugh Grovesnor — other than he threw one of the biggest 21st parties ever. It is not clear whether he even has a girlfriend, but if he is single then he is undoubtedly one of the most eligible bachelors in the world now. Expect to hear a lot more about him in the near future.

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Even if you didn't already know that Gary Friedman is the CEO of Restoration Hardware, a walk into his Napa Valley home might give it away. 

The massive mansion called Eight Palms was fully renovated by the luxury furnishing company's design team, and it's easy to tell. Crisp lines, precise symmetry, and meticulous design details are found throughout — not to mention a very strict focus on neutral colors, like grey.

Now that Friedman has put it on the market for a whopping $10.5 million, it's a good time to get an inside look at the place. Let's take a tour. 

SEE ALSO: A former Wall Streeter and shoe entrepreneur just bought this beautiful $2.86 million home in Los Angeles

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The mansion is situated on a breathtaking property in St. Helena, in California's famous Napa Valley. Natural elements are thoughtfully showcased throughout the grounds, taking advantage of the environment.

These eight-foot black gates are complete with elegant brass hardware, and make for a dramatic entrance to the estate.

According to the Wall Street Journal, Friedman paid $5.9 million for the house in 2013. He initially planned on turning it into a private getaway for himself, but then decided to remodel and resell it. The whole process took two years to complete, and the results — like this majestic entry courtyard —are stunning.

Source: WSJ

According to Jonathan and Drew Scott, stars of the HGTV show "Property Brothers," you'll want to be careful how you renovate or remodel your home.

"Just as there are features you want in a house, and that also increase the value of the space, there are changes you should not make to a house," they write in their book, "Dream Home: The Property Brothers' Ultimate Guide to Finding & Fixing Your Perfect House." "These are features that can bite you back when it's time to sell."

Here are six renovation "no-nos," according to the Property Brothers:

SEE ALSO: 2 inexpensive tricks that could help your home sell for more money, from HGTV stars the 'Property Brothers'

DON'T MISS: The secret to selling your house for more money

1. Don't sacrifice limited bedrooms for storage

If you're considering converting your tiny third bedroom into a walk-in closet, take a moment to reconsider.

"In family-friendly neighborhoods, a house with three small bedrooms is still more valuable than a house with two bedrooms and a big closet," they write.

But if your home has four medium-size bedrooms with no master bedroom, then converting one of the rooms to expand another is a safer move, according to the Property Brothers.

2. Don't get rid of the only bathtub

Families with kids will — more likely than not — want to look for a house with a bathtub, the brothers warn.

"You don't have to have a bathtub in the master, unless the house is in a retirement community, but do keep a tub in the shared or family bedroom," they write.

3. Don't spend a fortune building a custom home theater

The idea of a movie room or home theater might be loved by buyers, but not everyone will be willing to pay for it, the brothers caution. It's also hard to keep up with the newest, best, or flattest televisions when technology is always changing.

"All the gear you spent a fortune on easily becomes dated," they write.

I moved to Florida in 2005, just before the housing bubble peaked. Believing that prices couldn’t remain high, we bought a smaller home than we otherwise would have. Renting would’ve been nice, but we couldn’t find a rental in a school district we liked.

Home prices marched higher for six months or so, and the S&P/Case-Shiller 20-City Home Price Index reached 206. Then things slowed down. By late 2006, it was obvious that the housing market had changed. We know what happened next.

By 2011, real estate was ugly and millions of people had lost their homes. That’s when I sold my house.

The timing on the sale wasn’t especially brilliant. I took a hit, no doubt. But I got a pretty good price in an otherwise terrible market because of the location, and the buyer paid 100% cash. I moved the family closer to the kids’ schools and rented… for a few months.

But my wife isn’t cut out to rent…

Like many people my wife wants the freedom to change, rearrange, renovate, and basically do as she sees fit.  By the spring of 2012, we’d bought a small home in a nice neighborhood.

Our timing, or should I say my wife’s timing, was almost perfect.  The housing market was bottoming.  The Case-Shiller made a bottom in the spring of 2012, touching 114.  That was a 45% drop from the top in 2006. Since then, prices have come roaring back.  Our small home has appreciated rapidly.  Recently the Case-Shiller was reported at 188, a 65% gain from the bottom.

Now, I’m getting nervous again.

I’m not sold on the logic of “build it, and they will come.”  And I don’t think homebuilders are willing to take such a chance either.

While builders are selling more units than in the last several years, we’re still a long way from the boom years.  In June, we sold new homes at an annualized rate of 592,000.  In 2006 we were selling more than one million a year.  Following the financial crisis, that figure dropped below 300,000 and has been just creeping higher since then.

The most recent figure is just as it was in 2008 when sales were plummeting.

This is not Field of Dreams

The last time we sold 592,000 units when sales were trending higher was 1995.  We’ve added tens of millions of people to our population since then, and yet we are selling the same number of new homes that we did before we used email or surfed the net!

The housing market is smaller on other metrics as well.  As shown on the chart, since WWII residential fixed investment (home building) has typically represented 4% to 6% of GDP.

It fell below this level during the downturn of 1982 and again in 1990, but remained well above 3%.

In each case, housing made a V-shaped bottom, recovering quickly.  After the financial crisis, housing dropped to just 2.5% of GDP, and languished below 3% for years.

It’s great that residential construction now adds more than 3% to the national economy, but the fact that we’ve recently risen to the same level we touched at the bottom of the 1990 downturn is not a cause for celebration.

It’s not just a bubble, it’s employment

The story is much the same for employment.  Many middle-income jobs associated with home building, like plumbers, roofers, electricians, carpenters, etc., thrive along with residential construction.  That’s one of the reasons Federal Reserve officials want to drive interest rates lower. If they could motivate more home buying, that should lead to more home building, and create more middle income jobs.

It happened, just not on a scale the Fed would like.

In 2006, the construction industry employed more than one million people. By 2011, this number had fallen to 557,000, or, down 43%.  As the housing market rebounded, so did construction employment.  Today there are just over 700,000 working in construction.  That’s great, but it’s still 30% lower than where it was during the boom years.

Home prices keep pushing higher, with the median new home price above $300,000, a 6.1% gain over last year.  The median sale price for existing homes is just under a quarter million dollars, up 4.7% over the past year.

Who’s movin’ on up?

With median household income at $54,000, how does the typical family afford a home?  If wages aren’t moving up at a rapid clip, who will buy homes in the years ahead?

For the 64% of Americans that own their homes (including me), I’m glad home prices rebounded.  But it looks like prices have moved far past our ability to support them, while housing remains subdued in terms of the number of homes sold, its contribution to GDP, and its effect on employment.

If this is the best we can do with interest rates at historic lows and unemployment below 5%, it’s much more likely that housing is topping out, not breaking out.

Anyone considering jumping into real estate for the first time should stress test their decision.  What would happen if prices fell by 10%, or 20%?  If they had to move for employment reasons, could they come up with the difference?

While we haven’t returned to the heady days of 2005, it does feel like the markets have gotten ahead of themselves.  For those who absolutely must, or absolutely want to, buy a home, consider spending a little less than you can afford.  Like it did for me, it could trim your losses if the market rolls over.

SEE ALSO: London property values are plunging, but it's not just because of Brexit

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With one-bedroom flats in London costing as much as £1 million, buying property in the British capital can seem impossible.

To save money on his own London home, Alex Prindiville, CEO of the luxury car company Prindiville Motors, commissioned a team of manufacturers to design a two-bedroom houseboat moored at St. Katherine's Docks, where he lives with his family, for £300,000.

Based on his own home, the entrepreneur launched Prindiville Marine in April 2016, designing custom houseboats — which he calls "floating apartments"— for clients looking for more affordable property.

Developed by a team of 15 manufacturers based in Sheffield, boats start at £300,000 each and come fully furnished, with a supply of gas, electricity, and water. They can also be fitted with propulsion units so proprietors can go on cruises.

So far, the company has designed and sold four boats, making at least £1.2 million. It aims to build a total of 15 boats by the end of its first year.

Take a tour of Prindiville's houseboat to see what it's like inside:

Welcome to Alex Prindiville's home: a boat moored at St. Katherine's Docks in east London. The boat is accessible via the back, where there is a small outdoor section with seating for up to six people. This area is ideal for al fresco dining during the summer, Prindiville said.

After walking down a set of stairs, you get to the kitchen, which is fully equipped with a dishwasher, oven, gas hob, and other amenities.

Throughout the houseboat, the decor subtly adheres to a sailing theme. In the living room, there's a large L-shape sofa, wide-screen TV, skylight, and 13-inch porthole windows, positioned just above water level so that you can see ducks bobbing past, Prindiville said.

San Jose's homes are historically expensive.

According to data out Wednesday from the National Association of Realtors, the median price of a home in the California city is now over $1 million — $1,085,000 to be exact — the first time that the group has registered such a high figure in a metro area.

All in all, during the second quarter, home prices increased in 83% of the 178 metro areas that NAR tracks, and the average price of a single-family home nationwide increased 4.9% year-over-year, to $240,700.

The rise in prices also highlighted the vast shortage of homes being built, according to Lawrence Yun, the chief economist for NAR.

"However, with homebuilding activity still failing to keep up with demand and not enough current homeowners putting their home up for sale, prices continued their strong ascent — and in many markets at a rate well above income growth," Yun said in the report.

We've highlighted this problem numerous times, dubbing it "the new housing crisis," and the NAR data reiterates that the supply of homes on the market — both new and existing — is running well below demand, pushing prices up and keeping first-time homebuyers out of the market.

Yun noted that the rate of new homes coming onto the market is well under the average for most recovery periods, and as incomes and wages rise, more people are looking to buy homes. Couple that with people in existing homes being disincentivized to move, and you get bidding wars that push prices out of many buyers' range.

"Many listings in a majority of markets — and especially those in lower price ranges — had multiple offers and went under contract quickly because of severely inadequate supply," Yun said in the report. "This in turn dented affordability and without a doubt priced out a segment of buyers attempting to seek relief from fast-growing rents."

This problem was also reflected in the affordability index from NAR:

"Despite falling mortgage rates and a small increase in the national family median income ($68,774), swiftly rising home prices caused affordability to decline in the second quarter compared to a year ago. To purchase a single-family home at the national median price, a buyer making a 5 percent down payment would need an income of $52,255, a 10 percent down payment would require an income of $49,504, and $44,004 would be needed for a 20 percent down payment."

While San Jose may be a bit of an outlier, it certainly reflects just how expensive things are becoming for American homebuyers.

SEE ALSO: The number of foreclosures in America is at an all-time low

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Forget the Hamptons. If Howie Guja, photographer and real estate agent, keeps doing what he's doing, Bellport, NY, will be the next hot vacation destination.

Guja grew up in Babylon Village in Suffolk County — only about a 30 minute drive away from Bellport. Yet he stumbled upon it almost by accident as a student at the School of Visual Arts, when his sister's friend needed a ride there.

"As soon as you turn on South Country Road, you step back in time," he said. "It's just beautiful, beautiful leafy streets, white picket fences, clapboard and shingled homes, green shutters. I said, 'I have to come back here.'"

He did come back, and has lived in Bellport with his family since 2006.

His photos of the idyllic surroundings have earned him over 21,000 followers on Instagram, some of whom even turn into residents themselves.

Some locals worry that Guja’s Instagram will make Bellport too popular. One couple that he showed around town after they reached out through Instagram made an offer on a house on the spot.

He has since sold 10 homes — a large number considering Bellport is only two square miles.

The village may be small, but it continues to attract big names in fashion, art, and culture. Past residents include Vogue’s editor-in-chief Anna Wintour, designer Isaac Mizrahi, and First Lady Jackie Kennedy. Designer Francisco Costa, actress Isabella Rossellini, and art dealer Angela Westwater currently call it home.

Despite boasting some notable locals, Guja maintains that Bellport isn't "sceney."

"There's no traffic, there's no waiting to get into restaurants — it's just a quiet, laid back place where people aren't really showing off or anything," he said. "It's not a seen-and-be-seen kind of place."

Bellport is only 90 minutes outside New York City, but it couldn’t be more different.

“It's beautiful little town with a big preservation culture,” Guja said.

There’s no shortage of gorgeous scenery. “You can just walk out on the street and take a photo of almost anything and it's just so ridiculously charming,” he said.

Making the leap from renting to buying is thrilling and liberating — for many, it signifies the realization of "the American Dream." 

Buying a home is also a long-term commitment, and one that requires strong financial standing. 

If any of these signs strike a chord, you may want to delay taking on a mortgage in the near future.

SEE ALSO: How to figure out if you can afford to buy a home

You have a low credit score

Before considering home ownership, you'll want to check your credit score, which you can do through free sites like Credit Karma, Credit.com, or Credit Sesame.

"The higher your score, the better the interest rate on your mortgage will be," writes personal finance expert Ramit Sethi in "I Will Teach You To Be Rich." Good credit can mean significantly lower monthly payments, so if your score is not great, consider delaying this big purchase until you've built up your credit.

You have to direct more than 30% of your income towards monthly payments

Personal finance experts say a good rule of thumb is to make sure the total monthly payment doesn't consume more than 30% of your take-home pay.

"Any more than that, and your finances are going to be tight, leaving you financially vulnerable when something inevitably goes wrong," write Harold Pollack and Helaine Olen in their book, "The Index Card.""To be fair, this isn't always possible. In some places such as New York and San Francisco, it can be all but impossible."

While there are a few exceptions, aim to spend no more than one-third of your take-home pay on housing.

You don't have a fully funded emergency savings account

And no, your emergency fund is not your down payment.

As Pollack and Olen write,

We all receive unexpected financial setbacks. Someone gets sick. The insurance company denies a medical claim. A job is suddenly lost. However life intrudes, the bank still expects to receive our monthly mortgage payments ... Finance your emergency fund. Then think about purchasing a home. If you don't have an emergency fund and do own a house, chances are good you will someday find yourself in financial turmoil.

Certified financial planner Jonathan Meaney recommends having the equivalent of a few years' worth of living expenses set aside in case there is a job loss or other surprise. "Unlike a rental arrangement with a one or two year contract and known termination clauses, defaulting on a mortgage can do major damage to your credit report,"he tells Business Insider. "In addition, a quick sale is not always possible or equitable for a seller."

HGTV "Property Brothers" stars and co-authors of "Dream Home," Drew and Jonathan Scott, stopped by Business Insider to share their inside secrets for selling your home. 

Here's how to price your home so it sells for the most money possible.

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Mike Markkula, Apple's third employee and former CEO and chairman, has listed his longtime California home for sale for $45 million, The Wall Street Journal reported.

Dubbed "Rana Creek Ranch," the property spans 14,000 acres in Carmel Valley, about 85 miles south of Silicon Valley. In addition to a 5,413-square-foot main house, there's a private landing strip, lake, riding arena, and two barns.

Markkula and his wife, Linda, bought the home and surrounding acres for $8 million in 1982. "We've enjoyed it. We've loved it but it's time to move on," he told The Journal.

SEE ALSO: Restoration Hardware CEO Gary Friedman is selling his $10.5 million Napa Valley home — and it's just as stunning as you'd imagine

The couple originally purchased the property as a second home.

Over the decades they lived there, they increased the acreage they owned and remodeled the existing structures.

Markkula told The Journal that he also learned some ranching skills of his own. "I love rounding up cows on horseback. It's very soothing," he said.

Source: WSJ

There's a new champion in the war for the most expensive home for sale in America. The trophy goes to "Gemini," a 16-acre estate located on a barrier island in Manalapan, Florida. Take a tour of the sprawling wilderness compound. 

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In many parts of the world – depending on the period and place – buying a house or flat has the reputation of being a one-way ticket to wealth. Buy, hold, and be rich.

That’s worked for some generations, in some countries – including in much of Asia. But residential real estate’s reputation in many parts of the world as the ultimate wealth creator is often just wrong. In many markets, stocks do a lot better.

There are plenty of good reasons to own residential real estate. You need someplace to live, and you get tired of paying rent. You can borrow money for almost nothing. You can use your retirement money for a down payment. You saw your parents and grandparents grow rich by buying real estate when they were young. You like the tax advantages (in some countries) of owning real estate. You like cashing the checks that your tenants send you.

But owning a house or apartment, or several of them, often generates returns that are lower than those of the stock market. The chart below shows the long-term returns for the Singapore, Hong Kong and U.S. housing and stock markets. (Stock market results do not include dividends, and housing prices are nominal returns.)

The U.S. and Hong Kong stock markets win hands down when compared to house prices over time. It’s only in Singapore where owning a house instead of stocks has made more money.

The U.S. stock market rules

For the U.S. market, the results aren’t even close. The S&P 500 has averaged an 8 percent annual return since 1975. U.S. house prices have earned just 4.8 percent a year since 1975. In fact, over nearly every decade, the S&P 500 does better than housing.

The only decade when housing did better encompassed the recent housing bubble, from 2000 to 2010. Even accounting for the sharp decline in the last two years of that period, U.S. housing prices still outperformed the S&P 500 for the decade.

So far this decade, the U.S. stock market is ahead once again. And for the past 40 years, it would have earned you almost 4 times as much as U.S. residential real estate.

Hong Kong – stocks win again

Hong Kong house prices have done much better than U.S. housing prices (Hong Kong house price data since 1980). But since 1980, Hong Kong real estate (up about 1,500 percent over the period) has trailed Hong Kong’s Hang Seng stock index (up nearly 2,700 percent).

And only since 2000 have Hong Kong house prices started to catch up to stock market performance. During the 1980s and 1990s the stock market was unbeatable. Since 2000, Hong Kong housing has performed much better.

But residential real estate has beaten stocks in Singapore

Since 1980, Singapore real estate has generated better returns than Singapore-listed stocks. It’s the exception in the three markets we looked at.

Singapore house prices have averaged 6 percent annual returns since 1980; stocks have only returned 5 percent a year (based on data from Datastream and the Straits Times Index). But stocks did better than housing in the 1980s and the 2000s. It was Singapore’s hot property market in the 1990s that made the difference. But so far this decade, neither house prices nor stock prices have done well.

Real estate should be part of a well-diversified portfolio. But not at the cost of investing in shares.

SEE ALSO: Real estate prices could drop by 5%

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Landlords are increasingly shelling out concessions to renters in Manhattan as supply continues to outpace demand for ultra-luxury apartments.

The share of new leases with landlord concessions last month was more than double seen at the same time last year, according to Douglas Elliman’s latest market report. Nearly 11 percent of the new leases — compared to 5.3 percent in July 2015 — provided concessions to tenants. At the same time, the vacancy rate last month — 2.5 percent — was the highest seen for July in the last nine years, according to the report. Listing inventory also jumped to the highest level in more than seven years, reaching 7,681 — a 30.3 percent year-over-year increase.

These record highs are symptomatic of a market that continues to be “soft at the top,” said Jonathan Miller of Miller Samuel, the author of the Elliman report. Supply is outpacing demand for luxury rentals, and so prices have leveled off, he said. The median rental price hit $3,450, a mere .9 percent year-over-year increase.

“For all of 2016, rent growth has been dancing around zero percent,” Miller said. “There’s a sort of continuing theme. There is price growth, but it’s nominal.”

In a separate report, Citi Habitats reported that the borough’s vacancy reached 1.9 percent, the highest rate the brokerage has reported for July since it started tracking the stat in 2002. The brokerage also reported that 19 percent of rental transactions it brokered last month offered free rent for a month and/or payment of the brokers’ fees.

The market in Brooklyn tells a similar story. The median residential rent fell to $2,826, the first decline so far this year, though only a .8 percent drop from the same time last year, according to the Elliman report. The share of new leases with landlord concessions reached 9.5 percent, almost double the 5.6 percent seen in July 2015. Like Manhattan, listing inventory in Brooklyn hit a seven-year high of 2,424.

Meanwhile, in Queens, the median rental price was $2,768, an 8.2 percent decrease from the same time last year. Miller noted that the price fluctuation is primarily due to the mix of new development in the northwestern section of the borough.

SEE ALSO: The housing market has gotten ahead of itself

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This is how it is happening in Miami: A heroic building boom in Greater Downtown has created a phenomenal condo glut just when federal regulators decided earlier this year to track down money laundering in the real estate sector. It coincided with Brazil and Venezuela – Miami’s largest feeder markets – falling into political turmoil and economic chaos respectively. The “strong” dollar doesn’t help. And buyers from abroad have become scarce.

No one was prepared for this. The slowdown started a year ago when the resale inventory began to balloon. According to a new report by Integra Realty Resources for the Miami Downtown Development Authority, in May listings soared 58% from two years ago, to about 3,000 units, while monthly sales plunged 43%.

And new supply keeps on coming: In the second quarter, nearly 7,500 condos were under construction, with another 1,550 being marketed for sale.

So resale prices for condos built after 2001 have fallen for the first time in five years, down 4% over the first six months of the year, according to the report. Older buildings experienced steeper haircuts.

Many of these condos were bought by investors who’re trying to rent them out, thus pushing them into the rental market.

Alas, an additional 5,500 rental units are under construction in Greater Downtown. To top it off, with condos in trouble, larger projects are now switching to a “rental format” that will add even more supply to the rental market. Now everyone is praying for a throng of buy-phobic Millennials with big paychecks to come along and rent these units.

The impact of this glut ois already visible. After surging 10% a year ago, rents have “leveled off,” according to the report, still rising a smidgen for efficiencies and one-bedrooms, but stable or falling for other unit types. And this is just the beginning.

“The current direction of rents suggests that the rental market is going to favor the tenant for the balance of 2017,” the report said, while trying to keep an optimistic tone.

A similar scenario is playing out in other “primary markets,” such as New Your City, San Francisco, San Jose, and Houston, but all with different dynamics, according to AXIOMetrics’ new report on rents. In fact, rent declines in those key markets “drove down” the national averages.

In July, the national annual effective rent rose “only” 3.1% from a year ago, which is still a big increase for stagnant wages. But it was the lowest increase since February 2014. And down from a 5.2% year-over-year increase in July 2015. Rent growth has now fallen for nine of the last 10 months (chart via AXIOMetrics):

The report:

A separation is beginning to take place among large markets that are experiencing weak performance and smaller markets still showing robust strength. Some 20 markets among Axiometrics’ top 50 metros, based on number of units, recorded rent growth of 4.0% or higher in July. The issue is that none of them are what are commonly referred to as “primary markets,” such as New York, San Francisco, and Los Angeles.

Markets referred to as “tertiary,” such as Sacramento, Riverside, Salt Lake City, Las Vegas, and Nashville, make up the bulk of the top-markets list.

Meanwhile, some primary markets went negative, as the combined effects of slowing job growth and increased supply took their toll.

And among the primary markets with dropping annual effective rents, the report singled out these:

• Houston: -2.2%, “the fourth straight month the metro was below zero.”
• New York City: -0.2%, “the first time it was in negative territory since January 2014.”
• San Francisco: -0.7%, “the first time the market was negative since April 2010.”

In San Francisco, where exorbitant rents have combined into a syndrome called “the Housing Crisis,” the apartment glut is taking on peculiar flavors.

On Zillow, there are 1,149 apartments listed as available for rent. Note the dots that say “9+.” They represent bigger buildings, some of them with dozens of vacant rental units. Zillow just shows 500 homes in that image. If all 1,149 were shown, some areas would be a solid purple color:

The listings on Craigslist maxed out its gauge at 2,500 apartments for rent. Trulia lists 1,750 apartments for rent.

Apartments.com lists 3,094 apartments for rent. That’s up 34% from the 2,302 apartments that it listed in June. The densest clusters of units in both charts are in areas where the high-rise construction boom is most obvious when you walk down the street:

Real estate is local, and every market has its own unique set of dynamics. Houston is getting ravaged by the oil bust. New York and San Francisco have seen historic building booms of both condos and apartments, like Miami’s building boom, and now the growth in employment is sagging, and foreign investors are staying away, and many units sit empty.

Big move-in incentives have appeared, even in San Francisco, where there hadn’t been any for years. In some buildings, it’s one month free rent. In other buildings, it’s something else. For example, at the SoMa Square Apartments, which has all kinds of vacancies up and down the building, the move-in incentive is a “$1,500 gift card special”:

This real estate cycle took years to get to this extravagant level, supported by central bank policies around the globe that flooded the lands with nearly free money and repressed yields. But it has now run into reality: people don’t have to live in stocks and bonds, and there is no theoretical limit to the silliness; but people do live in dwellings, and when not enough people can afford these dwellings, just when a flood of these dwellings show up on the market, well then, the boom is going to unwind, perhaps messily, but it will take years, and this is just a feeble beginning.

Manhattan and Miami are already get mauled by it. Now it’s expanding to San Francisco, Silicon Valley, Southern California, and Texas even!

SEE ALSO: Real estate prices could drop by 5%

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It turns out that convincing billionaires to invest millions in luxury real estate is not the easiest sell.

In big cities across the US, glass skyscrapers and sprawling spec homes that broke ground to fanfare just years ago are now standing with empty units left to sell. Some have said there has been a slower influx of foreign capital thanks to economic instability abroad. Meanwhile, stricter regulations on all-cash, anonymous real-estate purchases — a favorite of foreign investors — have been introduced, potentially throwing some cold water on the luxury real estate boom of recent years. 

As demand for multimillion-dollar properties has fallen in recent months, developers are leaning increasingly on flashy extras to attract buyers. Here, we've rounded up some of the most extravagant perks we've seen lately.

SEE ALSO: Meet the famous residents and jaw-dropping properties inside San Francisco's own 'leaning tower'

Cars

New York City's most expensive condo is the penthouse at the Atelier condo building in Midtown Manhattan. The 10-bedroom, 13-bathroom condo, which takes up the entire 45th floor of the building, has been on and off the market for months. Though the penthouse is currently listed for $85 million, that price tag includes a number of extras, including two Rolls-Royce Phantoms and a $1 million yacht. Listing agent Daniel Neiditch of River 2 River Realty told Business Insider that he currently owns the cars and yacht, and will be signing over ownership once the purchase is complete. 

In a similar vein, a luxury home developed on spec by Douglas Elliman's Oren Alexander with his father, Shlomy Alexander, is priced at $36 million — or $43 million if you opt to buy some of the amenities on offer, which include a 1948 Jaguar XK120. The home, in Miami's ritzy Bal Harbour neighborhood, was designed by award-winning architect Chad Oppenheim, who most famously worked on director Michael Bay's mansion in Los Angeles.

Yachts

The Alexanders' Bal Harbour home could also potentially come with a 55-foot VanDutch yacht, should the buyer choose to buy it. 

"Our main goals were to simply create the best lifestyle experience possible," architect Oppenheim told Business Insider of the spec home's design and amenities.

Private restaurants

Residents of New York City's 432 Park Avenue will get to have a five-star restaurant all to themselves. Helmed by noted chef Shaun Hergatt, the upcoming restaurant has yet to be named and will span an entire floor of the 96-story building, which is the tallest residential building in the Western Hemisphere. Hergatt previously displayed his culinary skills at the Michelin-starred restaurant Juni, which closed in May. This time, though, his creations will only be available to those who already reside in the building.

In Miami, developers of forthcoming buildings at One Park Grove and Paraiso Bay partnered with local restaurateur Michael Schwartz to create residents-only restaurants and beach clubs. 

Home builders and resale agents voice frustrations, while remodeling contractors have never been this busy. Homeowners are on pace to spend more than $215 billion on remodeling this year—$73 billion on big projects (above $5,000 per project) and the remainder on small projects.

Building product companies are experiencing very uneven demand right now:

• Siding vendors have strong sales, as long-time homeowners (we call them nesters) frequently replace the siding.
• Deck companies benefit less, however, as recent movers tend to put in new decks, while nesters do not.

The graphic below illustrates the big discrepancies in spending between someone who has recently moved, has been in their home 4–9 years, or has been in the home ten years or longer.

SEE ALSO: Major US renting markets are starting to crumble

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The sale of the Playboy Mansion has officially closed, and the final sale price has been confirmed.

Daren Metropoulos, a principal of the private-equity firm Metropoulos & Co. and a former co-CEO of Pabst Brewing Company, paid $100 million for the historic property, a representative for Metropoulos told Business Insider. 

The 20,000-square-foot Los Angeles home had originally listed for $200 million in January, which made it the most expensive home for sale in America at the time.

As part of the terms of the sale, Hugh Hefner must be allowed to stay as long as he desires. The estate was sold by Playboy Enterprises, which leases it back to the 90-year-old Hefner. The company bought the mansion 45 years ago for just over $1 million, a historically high price for the area at the time.

The five-acre property includes the main 29-room mansion and a four-bedroom guesthouse.

Metropoulos purchased the next-door estate from Playboy in 2009, reportedly paying $18 million for it.Once Hefner's tenancy ends, Metropoulos apparently intends to connect the two properties into a single 7.3-acre estate.

"I feel fortunate and privileged to now own a one-of-a-kind piece of history and art," Metropoulos said in a press release announcing the closing of the sale. "I look forward to eventually rejoining the two estates and enjoying this beautiful property as my private residence for years to come."

Gary Gold and Drew Fenton of Hilton & Hyland had the listing, along with Mauricio Umansky of The Agency. Jade Mills of Coldwell Banker Previews International represented Metropoulos.

SEE ALSO: The $200 million Playboy Mansion just sold to its next-door neighbor

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NOW WATCH: Hugh Hefner's son reacts to the sale of the Playboy Mansion

The Playboy Mansion has officially sold for $100 million to its next-door neighbor, Daren Metropoulos, but that doesn't mean Hugh Hefner will be moving out anytime soon.

As part of the terms of the sale, the Playboy founder must be allowed to stay as long as he desires. A source familiar with the transaction told Business Insider that Hefner still has to pay rent: to the tune of $1 million a year. 

Hefner never technically owned the Los Angeles estate. Metropoulos purchased the home from Playboy Enterprises, which had leased it to Hefner. Under that arrangement, Hefner had reportedly paid a shockingly low $100 a year to live there. Playboy bought the mansion 45 years ago for just over $1 million, which was a historically high price for the area at the time.

The 20,000-square-foot home had originally listed for sale for $200 million in January, which made it the most expensive home for sale in America for much of 2016. The five-acre property includes the main 29-room mansion and a four-bedroom guesthouse.

SEE ALSO: The $200 million Playboy Mansion just sold to its next-door neighbor

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